Game Over ServiceLink
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We are sure you have heard the old saying what goes around comes around, right. Well, here we are again; The FTC vs Louisiana Real Estate Appraisal Board case has been brought back into the spot-light. As you may recall, the LREAB filed a civil case against the FTC in attempt to stop the case against them. That case was denied due to lack of jurisdiction. Then the LREAB filed against the FTC under the Administrative Procedure Act with the Middle District Court of Louisiana. The Middle District Court of Louisiana granted a motion to stay the case on July 29, 2019. To refresh your memory, you can view that order here.
As expected, the FTC has filed an appeal stating the Middle District Court does not have jurisdiction over administrative proceedings. Law360 wrote a brief summary of the proceedings on September 27th. See the article here if you are a subscriber.
So here is where this case takes an interesting turn. As part of the LREAB defense, some documents have been subpoenaed as evidence. ServiceLink received a subpoena and has complied, however ServiceLink has asked the judge for an “in camera review”. In case you are unfamiliar with that term, in essence, keep the documents out of the public to avoid harm to the supplying party.
You can view the ServiceLink motion here.
Well the documents have to do with fees to appraisers and fees charged to the lenders. There should not be anything confidential or proprietary in those documents; that is of course unless ServiceLink has something to hide. Apparently they do. Danny Wiley, the Chief Valuation Officer even gave a written affidavit certifying the proprietary and confidential nature of the documents. See Danny Wiley’s declaration as Exhibit C in the motion linked above. If you have ever met Danny Wiley, or interacted with him on social media, you have to agree, Danny Wiley certifying to anything is downright hilarious!
This has been discussed in great length on forums and social media over the past few days. Early Saturday morning, VaCAP received what appears to be some of the confidential documents ServiceLink is trying so hard to keep out of the public eye. Like any good journalist, we will never reveal our source, but we will say ServiceLink must have some pretty disgruntled employees to release such a document. VaCAP has not confirmed the legitimacy of the documents; however, we have no reason to believe they are false.
Take a look at what is now out there in the public eye; Appraisal Fees for 50 states, broken down by product type, divided into tiers. Tier 1 is for properties market value (MV) between $0 to $1,000,000, Tier 2 for MV between $1,000,001 to $2,000,000, Tier 3 for MV between $2,000,001 to $4,000,000, and final tier for ALL MV. This “one size fits all” pricing structure may not meet either of the two presumptions of compliance outlined in 129E of the Truth in Lending. Some might even say these documents are very clear evidence of price fixing. We all know price fixing is illegal.
If you take a look at the FTC’s website and view the public recordings, the motion to grant the in camera review for ServiceLink has not been granted and published. In fact other appraisal management companies have attempted to quash the subpoena entirely and have been unsuccessful. It appears some appraisal management companies are now seeking in camera review of their documents. As of this writing, no motion for in camera review of subpoenaed documents has been granted. Honestly, appraisal management companies using either presumption of compliance in 129E of TILA have nothing to hide. No confidential information exists. No proprietary information exists. It is either market data or a published survey. What is confidential or proprietary about either of these methods? Everyone should have the same results. What are the appraisal management companies hiding?
Could the FTC be considering a complaint against the appraisal management companies for price fixing? It sure looks that way.
Now that these documents have been released to the public, there is absolutely no reason for in camera review.
Game over ServiceLink…